SPX-"US Debt Downgrade: Markets in Peril"
Summary of the previous session:
The week started with a broken streak for the markets as equities continued to face challenges following Fitch's US debt downgrade. Even a jobs report released on Friday, although slightly below expectations, could not reverse the bearish trend.
Most active stocks: $Amazon.com(AMZN)$ $Apple(AAPL)$ $Tesla Motors(TSLA)$
Most active stocks
Main events of the week:
The week was marked by several key events, including the Nonfarm Payrolls (NFP) report which showed the US economy added 187,000 jobs in July, below economists' forecasts. However, the unemployment rate decreased to 3.5%. This data has been interpreted as showing a relative slowdown in the labor market, but not to the point of prompting the Federal Reserve to intervene immediately. The odds of rate hikes in September were low, with just a 13.5% chance according to the CME tool.
Current Scenario and Market Outlook:
The markets had a difficult week, with notable declines in the main indexes. $DJIA(.DJI)$ fell 1.1% on the week, ending a three-week streak of straight gains, which included an impressive 13-consecutive session streak of gains. The $S&P 500(.SPX)$ also fell 2.3% on the week, marking its worst performance since March. Similarly, the $NASDAQ 100(NDX)$ lost 3.02% during the week, recording its worst week since March as well.
US Index
Despite the weaker-than-expected jobs report, analysts say the Federal Reserve is likely to keep the fed funds rate unchanged in September, due to overall weak job growth and recent inflation data . The odds of rate hikes in November and December were also modest, at 24.8% and 22.7% respectively, according to CME FedWatch.
Market watchers agree that Fed Chairman Jerome Powell will need significant evidence of improvement before considering another rate hike. The outlook remains uncertain, and upcoming economic data, including the consumer price index, will continue to inform future central bank decisions.
SPX Levels
Key levels: 4600-4500-4450-4400
Higher levels: 4525-4545-4575 (4600 major resistance)
Lower levels: 4475-4450-(4400 major support)
SPX Levels
Next week
July inflation and producer prices for China (Wednesday) and the United States (Thursday and Friday).
Friday, US Consumer Sentiment, University of Michigan.
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Decreased by the prior day. $S&P 500(.SPX)$
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